DSE requests NBR to waive tax on T-bond trading

The Dhaka Stock Exchange has requested the National Board of Revenue to exempt treasury bond trading at the stock exchange from paying tax.The bourse sent a letter to the NBR in this connection through the Bangladesh Securities and Exchange Commission on February 1.In the letter, the DSE said that according to the 53BBB of Income Tax Ordinance, 1984, transaction of bond is not taxable.As treasury bonds and bills are one kind of bonds, they should not be taxable, it said.The bourse also requested the NBR to clarify whether the T-bond trading at the DSE is taxable or not.The DSE on January 8 this year sent the letter to the commission, requesting the stock market regulator to forward it to the revenue board.The decision of asking for the tax waiver was made on December 11 last year at a meeting which was chaired by Bangladesh Bank’s debt management department general manager Parimal Chandra Chakraborty.Representatives from BB’s information systems development department and financial sector support and strategic planning department, BSEC, DSE and Chittagong Stock Exchange were present at that meeting.They discussed the necessity of tax waiver on T-bond trading on the DSE platform and issues related to IT security regarding the govt securities trading on the bourse.The move came with the aim of expanding the secondary bond market and increasing the number of investors, ultimately making vibrant the secondary bond market which has remained inactive for years, said DSE officials.They said that investors preferred to transact treasury bonds at banks and post offices as transaction of the bonds outside the secondary market is tax free.As per the NBR rules, investors will have to count 0.05 per cent tax (Tk 5,000 for trading bonds worth of Tk 1 crore) if they settle any transaction of government securities on the trading platform.The central bank’s Market Infrastructure Module will be linked with the DSE so that investors can buy and sell government securities through the stock market, DSE officials said. They said the bond committee felt the necessity of modifying the MI module to ensure IT security.